Some great answers here already, you are returning interest on the money (so don't let that dishearten you!) but it is being skimmed off by tax - what others may propose is to ultimately invest excess money in ways that either make use of other tax allowances or are themselves assets that reduce other costs or appreciate over time attracting more money at point of sale.
In my case I purchased solar and battery storage for my property, going on the theory that electricity rates will increase in the next 20 years (and the micro-inverters are warantied for that period and the panels for 40 years) that reducing my post-tax electricity costs (themselves a cost of living tax on my income) was a good use of the money - the solar also produces income itself which under current UK tax law is not taxable - so an untaxable additional revenue stream. You'd have to run your own numbers and decide whether you're wanting a solar setup purely for money or see other advantages that mean money is not the primary factor. RoI (and a bit of energy price crystal ball forecasting) is a huge factor too, there are some systems that will never make a return (probably mine, I over-spec'd the quality and number of panels and batteries). You do have to consider if you'll move throughout the life of the installation also.
Others may choose to mess about with shares and receive the interest via dividends (up to £1k a year - another tax allowance).. of course this backfires if the company fails to perform better than the post-tax interest rate in your savings would otherwise afford you. I also participate in my employer's share incentive plan - which means the shares are purchased pre-tax instead of me being paid and then if I sell them after a period of time they do not attract tax either. The shares can lose some value when I go to sell them and the returns can be slightly poorer than bank interest and I will still be better off than having been taxed on each pound at source.
Then there's salary sacrifice for items not attracting Benefit in Kind (BiK) tax, you could tell your employer to buy you a Tesla instead of paying a portion of your salary which would allow you to purchase the Tesla (or any EV) pre-tax (which for higher rate tax payers is a 40% discount). Making even more use of your income pre-tax. While you have the cash already in your account this may seem irrelevant, but I suggest it as you could live off your savings and instead sacrifice other income for tax efficient purchases at great discount.
The more traditional way is as you identified, people just invest in a property and hope the property value grows from that beyond the post-tax interest they would otherwise make - that in its own way is the same as dabbling in the stock market. There's more taxes on additional properties to make this not always work out. Also the threshold/allowance for the Rent a Room scheme has not increased as much as inflation and has been the same since 2016! - so lodger/rental income above £7.5k still attracts tax and would be easily hit with a £625pm rental.
Most of these methods assume inflation will be positive and whatever you buy upfront now is cheaper than trying to buy it later and whatever you sell in future could be worth more than what you're buying it for today.
Would not underestimate the effort of managing or dealing with these things also, there's nothing wrong with deciding that the tax you pay on the interest is the path of least resistance and your time has more value than exploring all these means of tax efficiency. Interest rates are also widely predicted to fall in the near future.
Might also be worth considering asking a professional advisor beyond Stack Exchange.